Young Japanese individuals, particularly those in their 20s, are significantly boosting luxury sales, including jewelry, driven by profits from the surging stock market. The benchmark Nikkei index has climbed over 30% this year, largely fueled by the artificial intelligence (AI) boom. Many of these beneficiaries are first-time investors who utilized the government's expanded tax-free NISA program. According to an SMBC Nikko survey, 34.6% of investors in their 20s who profited from the market have either spent or plan to spend their gains on high-end items, a much higher proportion than older age groups, with only 11.2% of those in their 30s choosing luxury goods.
This consumption spree has led to a notable uplift in sales for Japanese department stores. The art, jewelry, and luxury items category saw a 19.3% year-on-year increase in May, more than double the overall department store sales growth of 8.3%. In April, this category also rose by 19.2%. Retailers are adapting to this trend by expanding their offerings for younger consumers; for instance, Happiness and D Co launched a new jewelry brand, No., in 2024 with larger, more conspicuous designs to cater to this clientele, with prices ranging from approximately $130 to over $13,000.
While the luxury spending boom benefits the retail sector, it also underscores a deepening societal divide. Japanese households have accumulated approximately $965 billion in unrealized stock gains over the past three years. However, this wealth is not evenly distributed. A January survey by JCB found that 38% of those in their 20s increased high-end consumption, while one-third prioritized saving. Nomura Securities' analysis indicates that the wealth gap between the top 20% and bottom 20% of individuals under 30 has widened by about $6.5 million in the last decade, the largest increase among any age group. This polarization is exacerbated by rising living costs, inflation, and increased job-hopping among young workers.
The overall Japanese jewelry market size was $12.4 billion in 2025 and is projected to reach $27.4 billion by 2034, growing at a compound annual growth rate of 9.40% during 2026-2034. This growth is partly attributed to increasing consumer purchasing power. The domestic jewelry retail market expanded to $7.6 billion in 2025, a 3.8% increase from the previous year, with a forecast of $8 billion in 2026, up 4.1%. This growth is supported by price adjustments due to rising precious metal costs, increasing the average selling price despite stagnant customer numbers. Gold and platinum prices continue to surge, with platinum mainly used in bridal rings, which also saw a significant increase in market size in monetary terms.
